Choice of Repairer

The AAAA Fights for Fairness with Comprehensive ACCC Submission

16 November 2016

AAAA lodged a comprehensive submission to the Australian Competition and Consumer Commission (ACCC) on Monday November 14. This has been a long process and the AAAA remains committed to ensure the fairest possible outcome is achieved for its members who are trusted by millions of Australian motorists nationwide. Our customers own their cars and should also own the right to select who repairs their vehicle without any form of competitive restriction.

The 80 page submission responds to important questions raised by the nation’s foremost competition regulator and consumer law champion relating to the sharing of vehicle repair data and information, as a part of the ACCC Market Study on New Car Retailing. In our formal response to the ACCC, we presented the results of an independent study of 325 independent repairers who service more than 18,000 cars per week.

Background:We met with the government soon after the election and applied pressure to ensure that the election promise on choice of repairer was honoured. Federal Minister for Small Business, the Hon Michael McCormack annexed the critical issue of the sharing of vehicle repair data and information to the ACCC study in October 2016.

October 2016The ACCC released an issues paper with detailed questions in relation to vehicle manufacturer and dealer practices that are severely disadvantaging independent repairers and importantly, our customers. The breadth of the ACCC’s investigative questioning represents the most detailed study the competition regulator has ever undertaken into the new car sales and after sales service sector.

November 2016In our formal response to the ACCC, we presented the results of an independent study of 325 independent repairers who service more than 18,000 cars per week. This study was designed to quantify the direct effects of the withholding of codes, software updates, Technical Service Bulletins, vehicle specific tooling and access to repair information portals by vehicle manufacturers from these predominantly small, family operated businesses and their customers. The independent study found that the direct losses suffered by independent vehicle repairers in time, effort and overall productivity comes at a staggering cost to of more than $4 billion per annum. The overwhelming majority of this cost is absorbed by independent repairers and not passed onto consumers, but such drastic productivity and profitability losses clearly cannot be sustained in an industry that employs tens of thousands of Australians and provides trusted quality automotive repairs, service and maintenance to millions of Australian consumers each year. The questions raised by the ACCC and supported by the AAAA’s survey research responses bode well for greatly needed changes to regulation. A mandatory industry code is the solution to ensure fairness not just for independent repairers, but importantly for our customers: The vehicle owners in Australia who elect to have their vehicle maintained and repaired by an independent repairer.

The fact that the current consumer and competition laws allow vehicle manufacturers to restrict access to a car owner’s online service logbook, software updates, known manufacturing faults and fixes or even the vehicle’s oil blend is simply unconscionable. The fact that our members are being regularly sought by their customers to assist them in having their warrantable consumer rights honoured by new car dealerships is equally disturbing. Somewhere in all of this, the concept of who actually owns the car has been totally lost. Consumers must retain the right to select their preferred repairer, access their vehicle service logbook, be given transparency and choice over where their vehicle data is sent and stored and have their statutory warranty rights respected. Through this detailed submission in response to the ACCC’s study, we seek to rectify this.

Independent Repairers: Invest in Training and Equipment.
The car manufacturers association has stated that our sector ‘needs’ to invest in tools and training. We wanted to address this head on because we know that they are telling government that cars may be a little too sophisticated for our sector and that why data can only go to dealerships.

We now have evidence that independent repairers are investing heavily in training and equipment in order to best service customers. The study found that this issue has nothing to do with our sector not being able to service and repair more sophisticated modern vehicles. All that is missing in most cases are things as simple as a six digit code to finish the work, or access to manufacturer information relating to known faults and fixes for specific vehicles. The withholding of this information by vehicle manufacturers and their dealer networks ensures that independent repairers spend hours troubleshooting issues that with direct access to the manufacturer information, could in many cases be rectified in less than 15 minutes.

The AAAA study of 325 independent vehicle repairers across Australia found that more than 80% view the withholding of vehicle repair data, vehicle specific tooling and known vehicle fault and rectification updates as a serious or critical issue for the future of their business viability.

The car companies, through their peak body the Federal Chamber of Automotive Industries (FCAI), maintain that they are not aware of any issues with independent repairers accessing repair and service information. This complete denial of the problem continues, despite the clear and repeated evidence provided to the FCAI through the AAAA’s register of complaints from consumers and workshops.

Our submission to the ACCC also strongly supports the competition authority’s view that vehicle manufacturer extended warranties may not offer additional benefit to consumers beyond their existing statutory consumer guarantee rights. In most if not all cases, these “free” extended warranties are merely a strategy to once again compel consumers to return to the dealership and pay heavily marked up prices for service and parts.